Caledonia Mining Report on 2009 AGM and Shareho...

FOR:  CALEDONIA MINING CORPORATION

TSX SYMBOL:  CAL
OTC Bulletin Board SYMBOL:  CALVF
AIM SYMBOL:  CMCL

May 28, 2009

Caledonia Mining Report on 2009 AGM and Shareholder Update

TORONTO, ONTARIO--(Marketwire - May 28, 2009) - Caledonia Mining Corporation ("Caledonia")
(TSX:CAL)(OTCBB:CALVF)(AIM:CMCL) announces that all resolutions proposed at the 2009 Annual and
Special Meeting of Shareholders held on May 20, 2009 were passed. Copies of the presentation made to
the meeting by the Chief Executive and the Chief Financial Officer have been posted on Caledonia's
website.

The key messages to shareholders as set out in the presentation and the subsequent discussions include
the following:

- The ramp-up of production at Blanket Gold Mine in Zimbabwe to the 24,000 ounces per annum level
continues but is dependant primarily on a continuous electricity supply.

- Electricity outages continue to impact negatively on production. Management is engaged with ZESA,
the electricity supplier, and the Zimbabwean Government to try and secure a reduction in the level of
outages and greater predictability on the timing of these outages so that operations can be scheduled
to minimise the impact on production. Blanket has sufficient operational flexibility to mitigate the
impact of scheduled outages.

- Working capital facilities have been secured to facilitate increasing levels of production. Stock
levels of consumables, and critical spares and parts, are being rebuilt as quickly as possible to
enhance Blanket's operational integrity.

- Blanket is in discussions with various banks regarding the provision of a short-term financing
facility to allow the rapid completion of the No. 4 Shaft Expansion (at a cost of approx US$2.25m).
This will allow production capacity to be increased progressively to 40,000 ounces of gold per annum.
The use of debt rather than internally-generated cash flows would allow this expansion to be completed
more rapidly, with a consequential enhancement in Blanket's NPV.

- In the medium term, Blanket will focus on exploration and development opportunities within the
existing mine area and in neighbouring areas. The timing and scope of further developments will be
determined by the availability of funding and exploration progress.

- Exploration will continue during the remainder of 2009 at the Nama Cobalt Project in Zambia, and
will focus on the promising ore-shale horizon with the objective of finding additional resources of
cobalt and copper rich ores that are capable of economic hydrometallurgical processing.

- Work continues on finalising the joint ventures with Mitsubishi Corporation in respect of Rooipoort
and Mapochsgronde.

Commenting on the outlook for Caledonia, Stefan Hayden, Chief Executive Officer said: "We are excited
by the return of Blanket to gold production. Whilst the environment in Zimbabwe remains challenging,
we welcome the recent improvements in operating conditions. We are optimistic that as stability
returns to Zimbabwe, Blanket will achieve its target of becoming a 40,000 ounce per annum gold
producer. Thereafter, we believe that Blanket can continue to expand further based on its existing
exploration and development opportunities."

At the Board Meeting held after the AGM, Mr Robert Liverant submitted his resignation from the Board
referring to his wish to reduce his commitments. Mr Liverant joined the Board of Caledonia on January
18, 2007. Caledonia's Board and Management acknowledge and thank Mr. Liverant for his contributions to
Caledonia during his time as a Director.

For more information, please visit: www.caledoniamining.com.

FOR FURTHER INFORMATION PLEASE CONTACT:

Caledonia Mining Corporation
Mark Learmonth
VP Corporate Development and Investor Relations
[phone]
[e-mail]
www.caledoniamining.com

OR

BuckBias
Alex Buck
[phone]

OR

RBC Capital Markets
Martin Eales
[phone]

Caledonia Mining Corp